Rightmove said UK asking prices rose by 0.4% in September after falling by 1.9% in August. However, the rise is below the 10-year average of 0.6%, home sales are down 7% versus 2019 pre-Covid, and asking price reductions reached a 12-year high. Nonetheless, the property website expects the market to pick up in autumn as mortgage rates ease. It said the number of homes on the market rose by 12% in the first week of September already.
Landlord Today have reported this as ‘ Typical tenant pays £2,800 more per year than in 2020 – Zoopla’
The latest figures from Rightmove point to green shoots of recovery for the housing market, with a slight pick-up in asking prices in September, a typically busy back-to-school time of year for housing market transactions after the end of the summer lull and before the festive season begins. While the Bank of England’s aggressive stream of rate hikes have hit borrowing affordability and house prices, mortgage sellers have started to offer more competitive rates to respond to dwindling demand as the central bank gets closer to the end of its tightening cycle. Despite this, it is likely that house prices will cool further this year as the culmination of high inflation, rising interest rates, the cost-of-living crisis and elevated borrowing costs take their toll.
Meanwhile, a separate report from Hamptons showed that residential rents in the UK are rising at their fastest pace on record. Average monthly rental costs surpass £1,300 for the first time, jumping 12% year-on-year in August. Clearly, the knock-on effect of surging mortgage costs has prompted many would-be buyers to turn towards the lettings market instead as they wait for mortgage rates to come back down again.
On the BBC’s Today programme, Aneisha Beverage, head of research at Hamptons said
- since 2016 landlords have been selling more properties than they have been buying
- confirmed by Bank of England, but no significant increase over the last 18 months
- Hamptons say 25% of rental properties sold stay in the PRS the remaining 75% are sold to owner occupiers
- since 2019, 39% fewer homes available to rent, while demand has remained the same
- potential buyers renting for longer as cost of renting is now less than paying for a mortgage
This is following an article in the weekend Financial Times reported how rents fall when more housing is provided (USA and NZ) even when homes provided are higher end, rather than specific affordable, as aspirational renters will move, freeing up affordable homes.